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Bowl Teams Face a No-Win Situation
As a Result of Football's Economics

By

Sam Walker Staff Reporter of The Wall Street Journal

Updated Jan. 26, 2001 12:01 a.m. ET

For Super Bowl winners these days, the spoils of victory just never seem to end. Among them: a sterling silver Vince Lombardi Trophy, a victory parade and the traditional invitation to the White House.

But there's one prize no Super Bowl team can ever count on: profits.

See a chart of what sports leagues pay players for reaching the championship game.

In one of the oddest developments in the sports world, the almighty Super Bowl is turning out to be anything but a financial boon for the teams who play in it. In fact, the strange economics of the National Football League mean that a trip to the big game can actually set a team back -- as much as $1 million after expenses. And those same economics are increasingly costing Super Bowl teams both games and money the following season.

"We'll be lucky if we end up breaking even" on the game, says John Mara, executive vice president of the New York Giants, who play the Baltimore Ravens this Sunday in Tampa. Adds Bob Wallace, senior vice president for last year's champion St. Louis Rams: "It definitely wasn't a moneymaker."

No other teams in pro sports go through this. In fact, the champs in pro basketball and even hockey almost always make a killing. But the NFL has a share-the-wealth approach that's gradually making it harder for the winner to stay on top. All that TV money from Super Bowl Sunday? It's divvied up among the league's 31 franchises. Those souvenirs and $400 tickets? The league keeps those proceeds, too.

All of which can have some unsettling consequences for teams that have reached the pinnacle of pro sports -- from higher ticket prices for fans of defending champions to some embarrassing belt-tightening by the teams. (Just ask the Rams' cheerleaders, who had to double up in hotel rooms last year.) Meanwhile, guess what reaching the Super Bowl in both 1997 and 1998 meant to the Green Bay Packers? They lost $1.5 million on the trips and have suffered cash-flow problems ever since. "It wasn't an opportunity to add to the bottom line," says team president Bob Harlan.

To be sure, few owners ever gripe about any of this; not only is the prestige of winning the game huge, but it also increases the value of the franchise in the long run. More importantly, the owners can't really complain about the way things work -- after all, they are the ones who came up with the system.

Unhappy with the prospect of one rich team buying up the best players and building a dynasty (like the Yankees have done in baseball), football's owners began pushing an old philosophy in the mid-'90s: keep things competitive. Their method: Give each team an equal share of the league's huge national TV contracts and set strict limits on player payroll. In this league, a George Steinbrenner wouldn't be allowed to outspend his rivals by $80 million.

"We've created a system where fans of every team know they have a chance to win," says former Dallas Cowboys executive Gil Brandt. Or as University of Chicago economist Allen Sanderson puts it, the NFL is "the most socialistic league in sports."

To some degree, it works. While some leagues are getting closer to "parity," NFL dynasties seem to be toppling faster than ever: Denver, the last team to win two Super Bowls in a row, followed up with a losing record the next season in 1999. And while the Chicago Bulls and the Yankees dominated their sports in the last decade, the NFL has produced 12 different Super Bowl teams in the past seven years. Sure, some purists miss the old NFL dynasties, but TV ratings are doing pretty well for a slumping sports economy -- down 6% this season, compared to a 23% drop in the NBA and a 10% falloff in baseball.

Burden of Winning

But come Super Bowl Sunday, the NFL philosophy has a flip side: It punishes winning. For starters, the game is always held at a neutral site where the NFL collects the revenue -- roughly $200 million by league estimates. Of that, the league says it spends about $30 million to stage the game (don't forget those fabulous halftime shows), while much of the rest is shared among all NFL teams.

The winning team? Its paycheck comes to $2.8 million, plus about $500,000 in stipends to cover expenses. It doesn't last very long; bonuses for coaches and other staff alone run into the millions, and even league officials concede that $500,000 doesn't cover the cost of a modern Super Bowl visit. "It's never been about teams making money," says Jim Steeg, the NFL's senior vice president of special events.

That wasn't the case for say, the Los Angeles Lakers when they played in the NBA Finals -- they pocketed millions by playing three games at home and keeping about half of the gate receipts. For baseball teams, postseason games can be worth about $1 million apiece, not to mention what they make in local TV money. (The Yankees' new $52 million contract is the biggest in sports.) Indeed, many pro teams count on playoff money to turn a profit for the season.

Yet for Super Bowl teams, the expenses only keep coming after the game clock expires. Never mind the $200,000 or so the St. Louis Rams spent on extra Super Bowl rings; to prevent other teams from poaching stars such as MVP quarterback Kurt Warner, the team had to commit to about $30 million in cash bonuses, a strain for all but a few teams. The result: Though not impossible, defending Super Bowl champions can struggle to achieve even moderate success the following season.

All of which is frustrating for loyal fans, especially when Super Bowl teams routinely raise ticket prices the following year, in some cases by as much as 25%. "I was crushed," says David Marler, a 41-year-old Atlanta Falcons fan whose team collapsed to a 5-11 record the year after reaching the 1999 Super Bowl. "I'm not renewing my season tickets."

As for the players, better hope you're one of the stars signing a new fat contract or an endorsement. The NFL itself paid each player only $107,000 for winning last year's playoffs and Super Bowl -- about $75,000 less than the Lakers got for their NBA title run. The Yankees? Winning shares came to nearly three times as much as the Super Bowl winners.

Don't tell him, but the Giants' star defensive end Michael Strahan is taking, at least in theory, a pay cut for playing this Sunday: During the regular season he earned about $417,000 per game. For the few fans who realize this, it's pretty shocking. "I would have expected the Super Bowl to be the mother of all bonuses," says Rick Beverstein, a Green Bay season-ticket holder.

Paltry Budgets

But maybe the most bizarre part of the NFL's Super Bowl strategy is how it doles out money for team travel expenses. For a game that could attract a national audience of 130 million, the NFL pays for only two charter flights and 200 hotel rooms. After that, teams are given four buses, some courtesy cars, and $100,000 to throw a postgame party. That's a fraction, of course, of what the teams really need, forcing some to cut costs -- from borrowing laundry machines from local teams to trading tickets to pay for party flowers. The Giants were even thinking last week about selling some of their tickets to travel agents to raise funds, instead offering them to fans or sponsors.

"It would be nice if those reimbursement levels were a little higher," says Jeff Diamond, president of the Tennessee Titans, last year's runner-up. "It's not the time to be skimping."

Of course, the Super Bowl does pay another kind of dividend: Sports-marketing experts estimate that winning the game can add $10 million to the value of a franchise. It also clearly helped the Packers and Broncos convince local taxpayers to build new stadiums. But Allen Fears, chief financial officer of the Broncos, still wishes the Super Bowl didn't make his job so difficult. "You could make ends meet," he says, "if you wanted to put your staff up at the Travelodge."

Equal Pay?

How much do Super Bowl players make? We looked at what other leagues pay players for reaching their championships, including the playoffs. Below, our estimates of their earnings, in order of size. Keep in mind: Football has the most players and the fewest games.

Player/Title

Player share

Comments

Derek Jeter , N.Y. Yankees / World Series winner

$295,000

Baseball is king. Players get 60% of the gate from four World Series games, among the biggest pots in sports.

Mike Piazza , N.Y. Mets / World Series runner-up

$239,000

Yes, baseball has more playoff games than the NFL. But should the World Series losers make more than the Super Bowl champs?

Shaquille O'Neal , L.A. Lakers / NBA Finals winner

$183,000

Just a small down payment for the big guy. Signed an $88.4 million contract extension after the game and bought teammates Rolexes.

Reggie Miller , Indiana Pacers / NBA Finals runner-up

$126,000

Didn't play his best basketball in the finals, but still got a new contract with a $3 million raise.

Martin Brodeur , New Jersey Devils / Stanley Cup winner

$109,000

Ouch. Even hockey pays more than football, although Super Bowl ratings are 10 times higher than an NHL finals game.

Kurt Warner , St. Louis Rams / Super Bowl winner

$107,000

The MVP of the game can't complain, though. He did get huge endorsements and an $11 million signing bonus.

Steve McNair , Tennessee Titans / Super Bowl runner-up

$92,000

Super Bowl was actually a pay cut for the losing quarterback. Regular salary paid him about $250,000 per game.

Mike Modano , Dallas Stars / Stanley Cup runner-up

$86,000

Handsome sum for a handsome guy, who made $6 million last season and has appeared in women's fashion magazines.